Shell Bolsters Loyalty

The Fuel Rewards Network, an extension of its Grocer Rewards program, is enhancing the brand proposition for Shell marketers and wholesalers.

By John Lofstock, Editor.

The competition for customers has never been so furious. Consumers have more and more choices every day, and the right customer loyalty program has the power to make or break your business. Consider that a Jupiter Research study found that nearly 80% of American consumers have at least one loyalty card. But while software, card programs and loyalty schemes are the tools of customer loyalty programs, they aren’t the essence of loyalty. To build loyalty, you must earn it.

Building customer loyalty programs has a great side effect—the programs yield customers who are brand advocates. Hence, the right loyalty solution offers threefold benefits: it can reduce costs, increase customer value and create a customer base that’s invested in your brand and eager to share information about your offerings.

Shell Oil Products U.S. has seen the data, understands the importance of loyalty and is once again springing into action by expanding its loyalty marketing program. The Houston-based oil company has unveiled its Fuel Rewards Network (FRN), an extension of its popular Grocer Rewards program, which is a consortium of partnerships with three of the country’s largest grocers.

The FRN program was introduced last month in Austin, Texas as part of Shell’s US Fuels Wholesaler Conference & Trade Show, which attracted more than 2,000 attendees, representing about 90% of Shell’s 14,300 branded stations in the U.S. It was one of two major initiatives the company announced to prepare its branded marketers for 2012 and beyond. In addition to FRN, Shell will begin rolling out the next generation of its nitrogen enriched gasolines.

Building Loyalty Shell jumped into loyalty in 2009 as part of a partnership with Kroger, which allows consumers to earn rewards on groceries that can be redeemed for fuel discounts exclusively at Shell. The Grocer Rewards program currently has penetration at roughly 60% of the Shell sites across the U.S.

“What we are aiming for with FRN is a program that is even bigger than just grocers—one that goes into all the other spin categories that the typical family has and allows them to earn fuel rewards based on those other purchases,” said Dan Little, North America fuels and forecourt marketing manager for Shell Oil Products U.S. “Those fuel rewards can be redeemed at all Shell stations, not just the 8,000 Shell units that have a grocery partner.”

To help the program gain widespread acceptance, Shell streamlined the registration process. All consumers have to do is pick up an FRN loyalty card at any participating Shell site then register it online where they can then download a host of things from all the ways they can earn rewards and a list of participating retailers to a mobile app that turns their cell phones into a loyalty card. The loyalty solution is being administered by Dallas-based loyalty marketing firm Excentus Corp.

“In our research we found that 89% of Shell consumers make online purchases,” Little said. “Using the Fuel Rewards Network Shell gas customers can now earn fuel discounts for the money they spend at websites like Nike, Macy’s, Expedia or Groupon–700 of the top-rated retail Websites in all.” For every $50 spent, customers can earn a fuel discount of anywhere from 5-25 cents off each gallon purchased.

Cardholders can also join the FRN e-coupon page which gives them access to electronic coupons that can be redeemed on purchases of everyday items at their local grocer or drug store. A third option to earn fuel rewards is the dining network, which allows customers to accumulate rewards by dining at any of 11,000 participating restaurants. For every $50 spent at a restaurant or using an e-coupon, customers earn an additional 10-cent discount on fuel. Since the rewards are fully stackable the discounts can be significant.

“I personally have customers pay as little as 17 cents for a gallon of fuel after using their rewards,” Little said. “These rewards provide the opportunity for significant discounts, which is what are customers are asking for in this difficult economy.”

Satisfying Wholesales The final piece to the Fuel Rewards Network takes into consideration the needs of Shell’s growing jobber network, many of whom operate convenience stores. The oil company developed a module called Shell Fuel Rewards that allows wholesalers to set up discounts and promotions in their existing non-shell branded c-stores, at their car washes or at their lube oil bays. All purchases at these locations will earn fuel rewards points.

What makes the FRN program even more attractive is that integration into new stores should be seamless. “Much of the work to implement the technology involved has already been done over the last two years as we went through PCI compliance and then grocer reward rollout through most of our markets,” Little said.

The beauty of these programs is that there are multiple partners that are all connected by a seamless loyalty interface. So when a Shell customer goes to a participating Shell station, they are prompted to utilize their rewards card prompting the fuel dispenser to automatically authorize the reward.

The majority of sites out there would have very little to enroll in the new FRN program because they’re already redeeming points. Some sites won’t have to do a thing. They simply sign a new participating agreement and they’re on their way. Other sites will have to order a small plug and play a small peripheral that carries an estimated cost of under $200.

“We have developed a comprehensive and complex loyalty solution that we are very excited about,” said Rick Altizer, North America marketing delivery manager for Shell. “At this point, response from marketers has already exceeded our aspirations. We’re expecting very strong participation from our branded network.”

Growing Fuel Sales As Shell looks to drive its loyalty business, its second major initiative is aimed at drivers themselves. The oil company is rolling out the next generation of its Shell Nitrogen Enriched (SNE) gasolines. The fuel contains a new and improved formula designed to deliver 20% more active cleaning agents than before.

“We are committed to high-quality, differentiated fuels and putting those best-in-class products into the marketplace for our wholesalers,” Little said. “This is also recognition that engine technology continues to evolve. New fuels that are needed to meet the demands of direct injection engines and other more modern turbo charged engines. Our new molecular structure helps provide unsurpassed protection of critical engine parts.”

After limited market tests, the rewards program and SNE fuels will be rolled out nationally early next year.

“The market is constantly changing and we believe we are focused on the needs of our customers,” Altizer said. “With these two key segments we are creating an even stronger brand proposition for our wholesalers and their retailers.”

“In our research we found 89% of Shell consumers make online purchases,” Little said. “Using the Fuel Rewards Network Shell gas customers can now earn discounts for the money they spend at websites like Nike, Macy’s, Expedia or Groupon—700 of the top-rated retail Websites in all.”

For every $50 spent, customers can earn a fuel discount of anywhere from 5 to 25 cents off each gallon purchased.

Cardholders can also join the FRN e-coupon page, which gives them access to electronic coupons that can be redeemed on purchases of everyday items at their local grocer or drug store. A third option to earn fuel rewards is the dining network, which allows customers to accumulate rewards by dining at any of 11,000 participating restaurants. For every $50 spent at a restaurant or using an e-coupon, customers earn an additional 10-cent discount on fuel. Because the rewards are fully stackable the discounts can be significant.

“I personally have customers pay as little as 17 cents for a gallon of fuel after using their rewards,” Little said. “These rewards provide the opportunity for significant discounts, which is what our customers are asking for in this difficult economy.”

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